The present invention relates generally to a payment system for and method of paying bills. More particularly, the present invention is a computerized system for paying bills or making other payments whereby a consumer may contact a single source from a remote location via a telephone, a computer terminal with modem, or other electronic means, to direct the single source to pay the consumer's bills instead of the consumer writing checks for each bill. An appendix is submitted with this specification which contains the program code of the present invention.
It has been common for many years for consumers to pay bills by way of a personal check written by the consumer and sent by mail to the entity from which the bill or invoice was received. Consumers have used other ways to pay bills, including personally visiting the billing entity to make a cash payment. In today's economy, it is not unusual for a consumer to have several regular monthly invoices to pay. Writing individual checks to pay each invoice can be time-consuming and costly due to postage and other related expense.
A need exists for a method whereby a consumer can contact a single source and inform the source to pay various bills of the consumer, to have the source adjust the consumer's account with the consumer's financial institution (i.e., bank, credit union, savings and loan association, etc.) to reflect a bill payment, and to actually pay the billing entity a specified amount by a particular time. The system should be efficient and not unreasonably expensive and relatively simple for a consumer to interact with. Some banks have attempted to provide a service for making payment to a few billing entities to which the banks have established relations. The banks that do provide that type of service are limited in that they provide the service only for their own customers since the banks have not developed a system for accurately acquiring and processing account numbers and balances of customers of all other banking institutions and coordinating that information with bill payment. Furthermore, banks have not developed a system for managing the risks involved in providing such a service and the inherent complexities of providing the service to consumers other than the bank's own customers. Therefore, a need exists for a single source bill payment system that would be available to any consumer, regardless of where the consumer banks and regardless of what bills are to be paid.
The present invention is designed to fulfill the above listed needs. The invention provides a universal bill payment system that works regardless of the consumer's financial institution and the bill to be paid. The present invention provides a computerized system by which a consumer may pay bills utilizing the telephone, a computer terminal, or other electronic data transmission means. Transactions are recorded against the consumer's account wherever he or she banks. The consumer may be an individual or a business, large or small.
The method of the present invention includes: gathering consumer information and creating a master file with banking information and routing codes; the generation of payment instructions by the consumer at a convenient location, typically remote from the payment service provider (e.g., at home), through an input terminal such as a personal computer, a push-button telephone or other like communication means; applying the payment instructions to the consumer's file; using computer software of the present invention to examine various files to determine the appropriate form of payment based on variables involving banking institutions and merchants; validating each transaction against a dynamic credit file and routing based on set parameters; and, if after processing no flags are encountered, adjusting the consumer's account (usually by debiting) and making payment directly to the payee in accordance with the consumer instructions.
The single source service provider for consumer bill payment may be any entity with the capability to practice the invention as described hereinafter. The foregoing and other objects and advantages will become more apparent when viewed in light of the accompanying drawings and following detailed description.